As part of its strategy to address rising rents and a shortfall of more than 50,000 affordable housing units, Cleveland is kickstarting development using a public-private partnership model.
The Cleveland Housing Investment Fund launched last year with a goal of raising $100 million to spur the construction of 2,500 to 3,000 new housing units.
The fund focuses on financing the construction of rental housing for residents with low to moderate incomes, with an emphasis on those earning less than 80% of the area median income, or around $55,000 a year.
The program also plans to develop a minimum of 100 units of for-sale housing, as well as neighborhood-scale rehabilitation projects. Average loans or investments per project are expected to be around $1 million to $5 million.
The fund has raised $53 million so far, with 216 new housing units in the works, Mayor Justin Bibb said on social media last week.
The program got off the ground with $18 million in seed money from the city, which used surplus American Rescue Plan Act funding for the initiative.
The initiative has received a $20 million commitment from KeyBank, $10 million from Huntington Bank and $5 million from Fifth Third Bank.
The fund is managed by LISC Fund Management, an affiliate of Local Initiatives Support Corporation, a national community development nonprofit organization, and was based on a similar model in Detroit.
“As any mayor will tell you, we love stealing each other’s ideas,” Bibb said at a press event last week. “I was just so proud of the work that LISC did in Detroit with their housing opportunity fund that I jumped at the opportunity to make sure that we brought that public-private partnership model to Cleveland.”
Earlier this year, the fund allocated nearly $6 million toward a 60-unit affordable housing project in the city’s Cudell neighborhood, situated near a major transportation corridor connecting West Cleveland to downtown.
“This progress is possible because of the strong partners who have stepped up alongside us to turn good projects into real homes for Clevelanders,” Bibb said in a Facebook post. “We’re proud of what we’ve accomplished in one year. And we’re aiming higher.”
